ESTATEPLANNING

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WILLS vs. TRUSTS

COMMON ESTATE PLANNING QUESTIONS

WHY YOU NEED A PLAN& WHAT IS RIGHT FOR YOU

The most common question I get when I tell

people I’m an estate planner is, “how can you talk

about death EVERY. SINGLE. DAY?” Here’s how our

approach to Estate Planning is di� erent: I don’t

want to talk about

your death, I want to

talk about your life.

Everyone has things

they hold dear, plans

for the future, a reason they’ve worked so hard.

Our goal is to understand what is important to you

and customize a plan that prioritizes those values

in the same way you do. With just a conversation,

we can get you on your way to being better

organized, decrease stress and administration for

your loved ones, and protect your vision.

I understand that often people put o� planning

because the process can be daunting. When we

start, they don’t know their options and they

don’t know why they would choose one option

over another. Well, that’s our role. Almost every

week, a client tells me that the process was so

easy that they wish they had done it sooner. The

experience and expertise of our team means we

can o� er options, give suggestions, point out

potential pitfalls, implement the

latest planning tools, and develop

solutions to even the most

complex problems.

So, while I encourage you to look through this

brochure and become a little more familiar with

the concepts of estate planning, please keep in

mind that all you really need to get started is your

story. We would love to meet with you and put

together a plan based on your life - because one

of the best parts of being an estate planner for

me is the opportunity to meet with clients and

talk about their amazing and interesting lives

EVERY. SINGLE. DAY.

YOUR STORY.All you really need to get started is

“I don’t want to talk about your death, I want to talk about your life.”

Stefanie BrownEstate Planning & Business LawAttorney

3320.251.6700

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COMMON QUESTIONS

TRANSFER OF PROPERTY

POWER OF ATTORNEY

HEALTH CARE DIRECTIVE

SUCCESSION PLANNING

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Learn how to leave detailed instructions for your loved ones

Answers to many of your important questions

Advantages of this legal structure designed to hold some or all of your assets

How different assets can be transferred upon death

Consider who will handle your affairs should something unexpected happen

Appoint individuals to make decisions on your behalf regarding your health care

Business owners need to consider additional planning

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Wills allow you to set out your wishes to protect the people you care for and the assets you have accumulated during your life. A will contains the instructions for a probate and does not prevent a probate.

If you die without a will, your estate will be subject to state law regarding who inherits your property. While your assets may still be subject to a probate, you will not be in control of the decisions regarding your estate.

Many provisions of a will are designed to provide the personal representative � exibility and simplicity, and to avoid unnecessary work and expense.

W I L L Sprotect the people you care for

PROBATE:

Truths vs. Myths

A will allows you to:• Select guardians for your minor children;

• Choose � duciaries, such as personal representative

(also known as the executor), trustee, or custodian;

• List who receives your property;

• Control the timing of distributions by incorporating

trust provisions (for example distributing property to

your children over time); and

• Capitalize on tax advantages.

Truths About Probate:• Probate is required even with a will;

• The public can see my probate documents

(including inventory lists with values);

• I can use a revocable trust to avoid probate;

• My personal representative may need to

appear in court;

• It may take weeks to get the personal

representative appointed;

• A probate may cost $3,000-$5,000.

5320.251.6700

A Revocable Trust is a document that contains many of the provisions of a will. It is designed to hold some or all of your assets. The Trust can generally be changed or amended at any time.

Initially, you will be the trustee of your revocable trust. Typically, you will notice little di� erence in your assets from a control or tax standpoint. The Trust allows for easy administration and control without a probate.

T R U S T Sprotect the people you care for

“I would highly recommend Stefanie

and her team. They helped us sort

through the complexities of our

situation and found a way to save our

estate thousands of dollars in taxes.”

– Bob Sexton

A will allows you to:• Select guardians for your minor children;

• Choose � duciaries, such as personal representative

(also known as the executor), trustee, or custodian;

• List who receives your property;

• Control the timing of distributions by incorporating

trust provisions (for example distributing property to

your children over time); and

• Capitalize on tax advantages.

Key Advantages of a Trust:• Assets may be transferred upon death without

delays, expenses, and public notices;

• The back-up trustee can immediately take over

management of the trust assets if your are unable

due to death, injury or illness. This can be especially

vital for business or land owners who need to

ensure that someone will have authority to keep

their operations running;

• A trust may incorporate tax planning to maximize

available tax exemptions and minimize the taxes

upon death; and

• The distributions may be subject to certain age

or purpose restrictions, such as distributions for

college expenses and/or distribution when the

child reaches age 30.

Myths About Probate:• The court gets a percentage of my assets;

• There will be a formal reading of the will;

• If you die without a will, the state gets everything;

• A Trust is the only way to avoid probate;

• A probate usually takes years;

• The probate will control ALL of my assets.

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A Health Care Directive is a legal document which combines the elements of the living will and the durable health care power of attorney. It is designed to allow you to choose the individual(s) who will make your health care decisions if you are unable to speak for yourself.

HEALTH C ARE DIREC TIVE

What does a Health Care Directive actually do?

A Health Care Directive can include your thoughts on health care decisions such as:

• Where you would like to receive health care/preferred doctor;

• Your thoughts on pain relief;• Goals, fears, concerns regarding health care;• Your wishes about � nal arrangements (burial or

cremation);• Religious or spiritual beliefs;• Organ donation.

Making your Health Care Directive e� ective:

• Ensure your agents can access your document. You may even consider giving them a copy.

• Put your Health Care Directive on � le with your clinic or local hospital.

• Communicate your wishes, both within the document and narratively to your agent.

• Take your Health Care Directive with you if you are admitted for care.

Includes a designation of legal agents to make important health care decisions.

Contains HIPPA release for ease of administration regarding your medical records.

Contains contact information to assist emergency personnel or medical professionals to contact your loved ones.

Provides direction to assure loved ones of their decisions regarding your health care in a di� cult time.

7320.251.6700

HOW IS PROPERTY TRANSFERRED AT DEATH?

WILL

BENEFICIARY DESIGNATION

OPERATION OF LAW

JOINT OWNERSHIP

OTHER TOOLS

TRUSTA will requires a probate in which the court appoints a personal

representative and oversees the payment of your expenses and the

distribution of your assets.

Designations made directly on assets, including � nancial assets, like life

insurance or retirement accounts, will control the disposition of those assets. Your named bene� ciary claims those assets directly from the administrator

or institution.

Assets that are not jointly owned and do not contain a bene� ciary will be subject

to Minnesota law on administration and distribution. The law dictates who

receives your assets when you die if no plan is in place, and, in many cases,

requires a probate.

Joint owners are vested with the ownership of the joint asset by operation

of law immediately upon your death, although some � ling may be necessary to document their sole ownership after

your passing.

See our “Other Tools” section for additional transfer options such as

transfer on death deed.

A trust designates a successor trustee to handle the assets. The authority of the trustee and the distribution

from the trust begin upon your death without the need for a probate or

any third-party authority. The trustee collects the assets and distributes them

according to the Trust.

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1Why do I need a plan?A plan allows you to select the important aspects

of what happens after your death. Without estate

planning documents, Minnesota law will control

and dictate who gets your property. Important jobs,

like the executor or guardian, may go to those who

volunteer rather than to the people who you would

select to ful� ll those jobs.

2While some estate plans do include tax planning,

a properly-drafted plan can direct all assets you

have to your select bene� ciaries and can ease

administration, even for items of less value. It is also

vital with any minor children so that you get the

opportunity to designate your chosen guardian.

Do I have enough money to need a plan?

33Yes, but we recommend against it. Many of our clients

have tried these services in the past and then found

out later they didn’t need everything they purchased

or, alternately, needed something much di� erent. One

of the most important parts of a planning meeting is

determining the right tools for you. There may be less

expensive or complex options available, depending

on your goals and assets. You can also gain valuable

education and peace of mind through the opportunity

to discuss your speci� c situation with a professional

and get your questions answered.

Can’t I just use an online service?

COMMON

Q U E S T I O N SPLANNINGE S TAT E

9320.251.6700

N O T E S

5Any assets left to your spouse will generally not

be subject to estate tax (commonly called “death

tax”). Assets that go to an individual other than your

spouse, including kids or grandkids, are exempt from

an estate tax up to the exemption amount each state

allows. Property of Minnesota residents, which are

over the exemption amount, will be subject to the

Minnesota estate tax. Larger estates may also be

subject to the federal estate tax. Proper planning

can e� ectively minimize taxes.

Will I be subject to “death tax”?

4It is important to choose people with the skill sets to

match the job duties in your documents. The skills to

care and nurture for your children are di� erent from

those needed to manage your money and pay bills;

however, one person may possess both sets of skills.

Part of the planning process will include discussing

these roles and how to select the people best suited

to � ll them.

Can I name the same person for multiple jobs in my plan?

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HOTIN

ESTATEPLANNINGT R E N D S

GRANDCHILDREN’STRUST

STRETCHIRAS

FAMILYLLC

“BUNCHING”CHARITABLE

GIFTS(FOR CABINS ANDHUNTING PROPERTY)

Contact us to find out more information about these current trends!

Call 320.251.6700 or email us at estateplanning@rinkenoonan.com

LET’S GET STARTED

11320.251.6700

A Power of Attorney is a document in which you give another person(s) the authority to act on your behalf regarding � nancial matters.

If you were to be seriously injured or ill and become unable to make your own � nancial decisions, your agent could pay your bills and manage your assets.

Without a Power of Attorney, it may be necessary for someone to obtain a conservatorship from the court. This process is much more time consuming and costly than preparing a Power of Attorney. Also, when you draft a Power of Attorney, you choose the person(s) who handles your a� airs.

POWER OF AT TORNEYshould something unexpected happen, who will handle your a� airs?

“Had I known this was going to be so easy I would have completed my estate plan a long time ago.”-Teresa W.

The authority given to another through the Power of Attorney will depend on its speci� c terms. A few potential uses of Power of Attorney would include:

• Pay real estate taxes and utility bills;• Gain access to funds for children;• Manage � nancial accounts;• Handle real estate matters;• Sign legal documents.

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For many of our entrepreneurial clients, the most important asset they own is their business. Developing a path for the continuation of your business and ensuring that you receive the value you built over the years

requires careful planning and expertise. We have the experience and knowledge of all the latest planning

tools to customize a succession process for your personal needs and expectations.

SUCCESSION PL ANNING

experience and knowledge of all the latest planning

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DevelopingSuccessors

CashflowAnalysis

Life InsurancePlanning

TransactionFinancing

Review of Tax

Implications

SaleDocuments

Buy/SellArrangements SUCCESSION

Planning

320.251.6700320.251.6700 13

OTHER TOOLSTransfer on Death Deed (TODD): A Transfer on Death Deed operates much like a

bene� ciary designation for real estate; it is an actual

deed recorded with the county recorder, which

speci� es who will inherit title to the real estate upon

your death. It does not transfer any ownership in the

property during your life, so the property can be sold

and you will continue to receive all of the proceeds.

The Transfer on Death designation can be removed or

changed at any time during your lifetime. Upon your

passing, those listed to inherit the real estate need

only � le an A� davit with the County to obtain full

legal title.

Quit Claim Deed: There may be bene� ts in some circumstances to

gifting property during your lifetime to your heirs

by deed. Transferring property during your life

in this manner may protect it from future estate

taxes or Medical Assistance claims should you

need nursing home care. While it is important to

understand the consequences of such a transfer,

it can be highly e� ective in protecting assets and

continuing your legacy property.

IRA and Retirement Accounts:Quali� ed, tax deferred assets, such as IRAs or similar

retirement accounts, generally utilize bene� ciary

designations to determine inheritance upon the

owner’s death. Proper designations can provide

signi� cant tax advantages for heirs or charities. It

is important to understand how these bene� ciary

designations can impact the accounts you leave to

the bene� ciaries.

Family Entities:Entities, such as partnerships or LLCs, can assist a

family in the joint ownership of property. Certain

entities not only create an e� ective way to manage

property by centralizing management, but can also

have signi� cant tax bene� ts and liability protection for

real estate, such as family cabins or hunting property.

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Minnesota is one of only a few states that imposes a “state estate tax” on its residents. For 2020, Minnesota exclusion amount is $3,000,000, under which an estate will not be subject to any estate tax. Minnesota’s estate tax applies to nearly all the assets of its residents, except for those property items located outside of the state. For non-residents, the estate tax generally applies

only to real estate or other select items located within the state of Minnesota. The Minnesota Department of Revenue considers

many factors in determining whether or not someone is a resident of Minnesota, including things such as where you spend the majority of your time, where you are registered to vote, where you receive your mail, and what you list as your primary address on other important documents.

What if I move out ofWhat if I move out ofMINNESOTA?MINNESOTA?

Residency Factors:• 183 days/year;• State that issued your drivers

license;• Location of employment;• Location of memberships;• Where you attend church;• Size and value of residences;• Filing of income taxes;• Location of bank accounts.

320.251.6700320.251.6700 15

WHEN TO REVIEW/ UPDATE YOUR PLAN

You change your mind;

Death of a loved one;

You no longer believe your � duciaries can serve or you no longer like your choices for � duciaries;

Your � nancial situation changes signi� cantly;

You have your 1st child;

You get married or divorced.

“Ensuring our family

business will be here

for generations was

top priority for us.

Stefanie’s knowledge

and experience in

business succession

has been invaluable.”

-Tom Schlough, Park Industries

Please contact us to set up an appointment and put these tools to work for you.Call 320.251.6700 or email us at estateplanning@rinkenoonan.com

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AM

320.251.6700 • estateplanning@rinkenoonan.com

1015 West St. Germain Street • P.O. Box 1497 • St. Cloud, MN 56302

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